ASrIA

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Socially Responsible Investment 21st Century
investment for Asia and the world Presentation
to Forest Trends Conference, 6th Nov 2002,
Tokyo www.asria.org
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Yakushima Island Zero Emission Efforts
Hydroelectric Power Generation, Dried Mackerel
Plant, Compost Production Utilizing Household
Refuse, Compost Center, Electric Vehicles
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4 Reasons why SRI is growing

• Fundamental Rationale
• SRI product choice and strategies
• Performance
• Legislation and Pressures for higher corporate
  governance standards
• Investor Demand

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Five World Economy
Linear Economy
Energy
Fossil Fuels,Nuclear
CO2, Nox,SOx
Materials
Heavy metalsCarcinogens,EDCs
Rich Ore Deposits,Ancient Forests etc..
Products and Services
Slide thanks to Morley FM
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One World Economy
Cycling Economy
Energy
Renewable Sources
Materials
SustainablyManagedResources
Wastes
Bio-degradablewastes
Quality of Life Enhancers

• Politicians promoting agenda.UK legislation sets
  new precedent

Slide thanks to Morley FM
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SRI Funds Globally

• Australia US10 bn including church
  assets, excluding shareholder activism
• Japan US 1 bn in funds
• USA US2.16 tn in funds and portfolios
• Canada US 32 bn
• UK US2.5 bn in funds plus US250 bn
  institutional portfolios
• Rest of Europe US 2 -3 bn (guesstimate) in
  funds

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SRI Research Criteria

• Environmental Impact
• Corporate Governance and Ethics
• Workplace Practices
• Regulatory Compliance
• Product Quality and Stewardship

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SRI Research Criteria
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CARBON DISCLOSURE PROJECT

• 35 institutional investors representing assets in
  excess of 4.5 trillion (specifically pension
  funds, fund managers, insurance companies),
• letter on 31st May 2002, to the Chair of the
  Board of the 500 largest companies in the world
  as measured by market capitalization
• asking them to identify the business implications
  of their exposure to climate-related risks, and
  what they are doing to address/embrace these
  risks.
• deadline for responses by end of November 2002
• analysis to be undertaken by Innovest, US and
  published February 2003 www.cdproject.net

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Application of portfolio management to
biodiversity

• Although the loss of biodiversity is considered a
  key environmental problem it is managed based on
  theories and methods that have been considered
  outdated in the financial markets for more than
  50 years.
• The one-sided interest in the yield of crop
  plants has led to mis-balanced crop plant
  portfolios. Professional investment advisers
  would never advise their clients to invest in a
  stock portfolio that is as mis-balanced.
• The report sketches out the basics of a portfolio
  theory of bio-diversity and demonstrates the
  consequences of a portfolio view on biodiversity.
  It introduces 9 rules that are considered
  self-evident in the management of securities
  today.
• Dr. Frank Figge Center for Sustainability
  Management (CSM) e.V. with Gerling Sustainable
  Development Project Tel [phone] Fax
  49-4131-78-2186 E-Mail Figge_at_sustainablevalue.c
  om www.bio-folio.com

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ASrIA Organisation
Global membership 26 investment funds, 6 research
houses, 15 investment/ professional services, 4
corporates, 28 associates
3 full time staff, 2 directors, 3 non-exec
directors
Not-for-profit membership association
Extensive global network
Virtual and physical connections
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ASrIA Goals

• Mission To develop awareness of SRI in Asia and
  ultimately to increase investor choice of SRI
  products

• Specific Objectives
• Generate understanding of SRI
• Increase information and market intelligence
• Lead continuous learning effort
• Open up opportunities for ASrIA members
• Break down barriers to SRI practice

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Website

• Japanese and Chinese language
• Asian SRI Research Coverage
• Asian SRI Fund Data
• Events calendar
• ASrIA events page
• Jobs exchange
• Quick polls
• Discussion forum
• Conference website

4,200 ebulletin subscribers
600 hits per day
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ASrIA Profile, 2002

• 32 formal presentations at conferences/ group
  events
• Asia SRI
• Global SRI Asia
• Multiple 1x1 meetings with
• Finance/Business groups and
• associations
• Church/Charitable groups/NGOs
• Extensive Media coverage
• Asian and Global financial media
• General Interest

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Conferences
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Research Opportunities Issues

• Opportunity for SRI in Greater China
• Preliminary market analysis of HK SAR, Taiwan,
  China
• GM Foods Will their Fate be Decided in Asia?
• Response of the agri-food industry in Asia to the
  continuing GM debate
• SRI and Pensions in Asia
• Exploring the dual SRI and pension dynamic in
  Asia
• Labour Standards in China
• The dilemmas involved with investing responsibly
  in China when considering labour standards
• Environmental Legislation and Mgmt in China
• Current legislation and what it means for
  implementing EMS. Green Olympics case study
• SRI for Taiwan
• Educational piece on SRI for Taiwan market with
  analysis of market opportunity for SRI in Taiwan

Now
Now
Oct
Nov
Dec
Dec
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Research Publication Examples
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Are your Clients interested in SRI?

• characteristics of SRI adopters similar the world
  over, they
• Work in caring professions
• Support NGOs and community groups
• Belong to religious networks
• Are often first time investors
• Attractive to female investors
• SRI attracts a different type of investor to day
  trader/gambler

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Evidence from Singapore and Japan..

• Nikko Asset Management, who launched one of the
  first Eco-Funds in Japan found their investor
  base to have a higher proportion of women and
  many first time investors.
•  
• The UniFem-UOB Fund in Singapore found that 75
  were first time investors, 75 were women and 75
  were blue collar workers. The latter finding
  suggests that SRI also appeals to lower income
  investors.

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Asian Environment Outlook 2001

• The regions environmental degradation is
  pervasive, accelerating and unabated
• Water Pollution
• Water Scarcity
• Wastes and Toxics
• Air Pollution
• Resource Degradation/Depletion
• http//www.adb.org/documents/books/aeo/2001/defaul
  t.asp

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SRI in Asia Today
JAPAN Nikko-Eco one of SRIs biggest success
stories globally..9 other SRI choices proven
market among one of the worlds largest elderly
populations
HONG KONG ASrIA inaugural conference Nov 2001
Kingsway Fund Mgmt, Hendersons Global
Sustainability Fund Friends Ivory Sime about
to launch SRI fund
AUSTRALIA Developed SRI market AU10 billion
under management several SRI research houses
MALAYSIA Some faith-based funds
SINGAPORE United Global Unifem UOB FundASrIA
Seminar April 2002

• Starting to gain momentum, but a long way to
  goan opportunity on which to capitalise

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SRI Developments in Asia in 2002

• ASrIA has 75 members!
• Multiple CSR/sustainability conferences
• Increased media coverage of the issues
• Samsung Eco Fund launched in Korea
• Eco-Frontier research initiative in Korea
• Kingsway Sustainable Fund launched in HK
• The Seeds established in Thailand
• Friends Provident, Henderson, Jupiter, Morley,
  Generali global funds registered for sale

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SRI prospects in Asia Focus One
KOREA Corporate governance a big theme.retail
equity investment booming!

• TAIWAN Mutual fund industry 40 CAGR last 17
  years, only 16 penetration! ... active
  religious groups. environmentally aware
• ... a core target market

SINGAPORE Developed and sophisticated retail
investment market significant state
participation in equity investment.
HONG KONG Government increasingly focused on
the environment and public aware ..new scope
with MPF big charitable institutions (eg Jockey
Club, Kadoorie Foundation)
Growing populationshigh growth mutual fund
industriesdifferentiation opportunity
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SRI prospects in Asia Focus Two
CHINA The BIG one!Govt. sponsored CG
initiatives nascent mutual fund industry and
growing retail equity cultureSRI could be an
angle for early participation
THAILAND High level of interest in SRI but very
early days, desire for modernisation with
environmental benefits.
INDIA Vast educated population.a major SRI
opportunity. Retail financial services taking
off .. but work to be done

• PHILIPPINES High environmental awareness and
  public participation in reform.. Poorly developed
  savings culture.

MALAYSIA Wealthy, educated populationactive
religious groups stronger retail investment
culture
INDONESIA big need.. fragmented opportunity
Growing populationsless developed investment
fund industriesneed for SRI approach substantial